Iao Kun Posts Bigger-Than-Expected Q2 Loss, Guides 2015 Lower

Wednesday 26th of August 2015

Iao Kun Group, an operator of VIP rooms in Macau, reported a slightly larger loss than expected in Q2 and warned that its rolling chip turnover will be lower in 2015 than previously anticipated.

The VIP room gaming promoter said its non-GAAP loss narrowed to $2.2 million or $0.03 per share from a loss of $7.5 million or $0.12 a year ago but missed the $0.02 loss that had been expected by analysts polled by Capital IQ.

Revenue more than halved to $21.9 million from $46.7 million and fell short of the $26.1 million consensus estimate, primarily due to lower rolling chip turnover during the quarter. Rolling chip turnover, which measures the aggregate amount of players' bets and overall volume of VIP gaming room business transacted, dropped 63% to $1.7 billion.

On a reported basis, the total loss narrowed to $23.8 million or $0.38 per diluted share from $56.5 million or $0.94 a year earlier.

"The overall VIP market in Macau continues to be affected by the ongoing macro environment, and as such we are continuing to prudently manage our capital," chairman Lam Man Pou said in a statement. "We continue to explore overseas alternatives, such as our recent acquisition of Australian profit interests, to expand our overall VIP presence and provide additional diversification to our current sources of revenue."

For 2015, Iao Kun group said it lowered its guidance for rolling chip turnover for its five existing VIP rooms in Macau to between $6.0 billion and $7.0 billion, from a previous range of $7.0 billion and $8.5 billion.

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